Rules 'should apply to YouTube'
The music industry is losing out on millions of pounds in revenue because of "a fundamental flaw" that means sites including YouTube are exempt from copyright law, according to a new report.
The International Federation of the Phonographic Industry (IFPI), which represents 1,400 record companies around the world, said the video sharing website should be made to operate under the same rules as sites such as Spotify.
Its digital music report estimates YouTube, which is free to access and has more than one billion monthly users, and other firms like it pay out 641 million US dollars (£437 million) to record companies while subscription services like Spotify pay out 1.6 billion US dollars (£1 billion) while only having about 100 million users.
IFPI chief executive Frances Moore said "clarification" was needed on the law.
She said: "It's not something the industry can fix, it's something that government can fix."
She added: " The value gap is a fundamental flaw in our industry's landscape which sees digital platforms such as Daily Motion and YouTube taking advantage of exemptions from copyright laws that simply should not apply to them.
"Laws that were designed to exempt passive hosting companies from liability in the early days of the internet - so called "safe harbours" - should never be allowed to exempt active digital music services from having to fairly negotiate licences with rights holders.
"There should be clarification of the application of 'safe harbours' to make it explicit that services that distribute and monetise music should not benefit from them."
The report also found the number of downloads worldwide falling by similar rate as CD sales but digital revenues rose to 6.9 billion US dollars (£4.7 million) accounting for almost half of all global sales (46%) which his 14.97 billion US dollars (£10.2 billion).
A YouTube spokeswoman added: " YouTube provides a global platform for anyone - from vloggers to politicians, global brands to small businesses - and of course, musicians too - to connect with people.
"We pay hundreds of millions of dollars to the music industry every year, have deals in place with hundreds of independent and major labels around the world, and provide rightsholders with tools to control their copyrighted work."